METALS-Copper eases as Chile, Peru supplies pressure prices

(Updates prices)

Sept 3 (Reuters) - Copper futures contracts slipped on Thursday on easing supply disruptions in top copper producers, although a five-month rally has boosted prices by around 50%.

Benchmark three-month copper on the London Metal Exchange fell 0.8% to $6,643.50 a tonne by 0703 GMT, having gained 51% since March 19, its lowest 2020 price level.

The most-traded October copper contract on the Shanghai Futures Exchange declined 0.8% to 51,760 yuan ($7,570.68) a tonne. It has risen 49% since March 23.

“Mine supply disruptions and stronger-than-expected economic recovery in China have supported prices. Depleted inventories and supply challenges are keeping the fundamental backdrop supportive,” ANZ said in a note.

“Nevertheless, easing supply disruptions in Chile and Peru should see copper prices come under pressure in the short term.”

July copper output at Chile’s state-owned miner Codelco fell 4.4% year-on-year to 133,300 tonnes, but production rose 3.8% to 100,900 tonnes at BHP’s Escondida mine. Output increased 22.8% to 58,100 tonnes at Anglo American and Glencore’s Collahuasi mine in the same period.

Meanwhile, output in Peru recovered in July from a slump in the first half of 2020 due to disruptions caused by the coronavirus pandemic.

A stronger U.S. dollar also pressured greenback-priced LME metals, which became less attractive to buyers holding other currencies.


* LME copper inventories MCUSTX-TOTAL have depleted 70% since the 2020 peak level in mid-May, to near a 15-year low of 84,975 tonnes. ShFE stockpiles CU-STX-SGH, though barely moved recently, were still 55% below the year-high level hit in March.

* China’s GEM Co Ltd signed a deal to buy battery-grade nickel chemicals from a rival plant in Indonesia.

* LME aluminium dipped 0.3% to $1,781 a tonne, while nickel dropped 2.8% to $15,265 a tonne. ShFE nickel declined 1.8% to 120,010 yuan a tonne.

* For the top stories in metals and other news, click or ($1 = 6.8369 yuan) (Reporting by Mai Nguyen; Editing by Subhranshu Sahu and Amy Caren Daniel)